Malaysia's Sime Darby shares tumble on rights issue report

KUALA LUMPUR, Aug 24 (Reuters) - Shares of Malaysian plantations-to-motoring conglomerate Sime Darby Berhad took a 5.2 percent tumble on Monday after media reported it was planning a 6 billion ringgit ($1.42 billion) rights issue to pay off debt.

Malaysian companies with foreign denominated debt such as Sime Darby face risks from the tumbling of the ringgit, which has lost over 16 percent against the US dollar this year, making it the worst-performing currency in emerging Asia.

Sime Darby holds 61 percent of its 17.99 billion ringgit debt in foreign currencies, according to ratings agency Standard & Poor's.

Its shares hit a low of 7.070 ringgit after the midday break on Bursa Malaysia, trending at levels not seen since its plunge to 7.000 ringgit in October 2011.

The Star newspaper report, citing an unnamed source, indicated that the rights issue had been proposed by several banks and could take place by the end of this year.

A Sime Darby spokesman declined to comment on the report.

Low crude palm oil prices could also be a reason for Sime's plunging share price as it derives half its earnings from its plantations segment, one analyst said.

Malaysian palm oil futures fell more than 3 percent on Monday on concerns over China's economy, reaching 1,924 ringgit a tonne by the midday break.

($1 = 4.2320 ringgit) (Reporting by Emily Chow; Editing by Stephen Coates)